Leaders from Bangladesh’s apparel and textile sector have urged the government to change the current cash incentive system to support local spinning mills and protect the wider supply chain.

Industry representatives say the existing export-linked incentive does not address rising production costs faced by spinners. They warn that without reform, domestic mills will continue to lose competitiveness as global demand remains weak.

They have proposed shifting incentives to the yarn pricing stage at the point of sale. They argue this would ensure direct support for spinners and help stabilize yarn prices for garment exporters.

The proposal comes ahead of a meeting at the Ministry of Finance with key stakeholders, including BGMEA, BKMEA and BTMA, to discuss yarn import issues. Senior officials and industry leaders are expected to attend.

BTMA President Showkat Aziz Russell said incentives should be reflected in yarn prices during sales.  He warned that Bangladesh risks falling behind competitors like India, where textile producers receive energy subsidies and production-linked incentives.

BKMEA President Mohammad Hatem said incentive policies must clearly separate direct and indirect support. He said a 5 percent incentive would be reasonable if routed through exporters, but direct support for spinners should be at least 10 percent.

BKMEA Executive President Fazlee Shamim Ehsan said high input costs and limited policy support were squeezing the sector.